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A comparison of technology firms in Beijing and Shenzhen
Frontiers of Economics in China
  • Zhaoming CUI, Shanghai University of Finance and Economics
  • Kwok Hon, Leonard CHENG, Hong Kong University of Science and Technology
  • Lian ZHOU, Peking University
Document Type
Journal article
Publication Date
Higher Education Press
  • Chinese technology firms,
  • comparison of performance,
  • operating characteristics

Beijing and Shenzhen are both well known for their high-tech industries. This paper compares the financial performance of the two cities’ technology firms and explores the effects of the firms’ operating characteristics and strategy choices on their performance. We find that when comparable samples are used, the firms in Beijing performed better than those in Shenzhen. In addition, for firms both in Beijing and Shenzhen, the ratio of current asset to total asset had a significantly positive effect while both short-term and long-term debt-asset ratios had a significantly negative effect on the performance. The strategy variable sales expenses as a fraction of the cost of goods sold had a significantly positive effect on the performance of firms in Beijing, but the positive effect on firms in Shenzhen was not significant. R&D inputs contributed significantly to the pre-tax profitability of Beijing firms, but had no significant effect whatsoever on Shenzhen firms.

Citation Information
Cui, Z., Cheng, L. K., & Zhou, L. (2012). A comparison of technology firms in Beijing and Shenzhen. Frontiers of Economics in China, 7(3), 434-464.